Bitcoin at its highest in 2 years, hits $50,000. What is the reason behind this sudden surge?
Bitcoin reached its highest value in two years and hit the $50,000 mark earlier this week. Bitcoin has seen a meteoric rise in the last couple of months. In 2024 itself, Bitcoin has gone up by over 16%, marking a strong recovery.
Bitcoin, the leading cryptocurrency, has surged past the $50,000 mark for the first time in over two years. This notable milestone comes as optimism grows around potential interest rate cuts later in the year and following regulatory approval for US exchange-traded funds (ETFs) tracking Bitcoin’s price.
The cryptocurrency market has witnessed a 16.3 per cent increase in Bitcoin’s value since the beginning of the year. On Monday, Bitcoin reached its peak value since December 27, 2021, hitting $49,899 at 12:56 PM EST, marking a 4.96 per cent increase for the day, with its value oscillating around the $50,000 level.
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- Bitcoin At Its Highest In 2 Years, Hits $50,000. What Is The Reason Behind This Sudden Surge?
TECH
Bitcoin at its highest in 2 years, hits $50,000. What is the reason behind this sudden surge?
Bitcoin reached its highest value in two years and hit the $50,000 mark earlier this week. Bitcoin has seen a meteoric rise in the last couple of months. In 2024 itself, Bitcoin has gone up by over 16%, marking a strong recovery
FP Staff February 13, 2024 09:33:39 IST
Bitcoin, the leading cryptocurrency, has surged past the $50,000 mark for the first time in over two years. This notable milestone comes as optimism grows around potential interest rate cuts later in the year and following regulatory approval for US exchange-traded funds (ETFs) tracking Bitcoin’s price.
The cryptocurrency market has witnessed a 16.3 per cent increase in Bitcoin’s value since the beginning of the year. On Monday, Bitcoin reached its peak value since December 27, 2021, hitting $49,899 at 12:56 PM EST, marking a 4.96 per cent increase for the day, with its value oscillating around the $50,000 level.
Antoni Trenchev, co-founder of the crypto lending platform Nexo, described the $50,000 mark as a significant milestone for Bitcoin. He attributed this achievement to the launch of spot ETFs last month, which not only failed to push Bitcoin above this key psychological level initially but also led to a 20 per cent sell-off.
The positive momentum extended beyond Bitcoin, with crypto-related stocks also experiencing gains on Monday. Shares of Coinbase rose by 4.9 per cent, while crypto miners Riot Platforms and Marathon Digital saw increases of 10.8 per cent and 11.9 per cent, respectively. Additionally, software firm MicroStrategy, a notable Bitcoin buyer, saw its shares rise by 10.2 per cent.
Ether, the second-largest cryptocurrency, also saw an uptick in its value, rising by 4.12 per cent to reach $2,607.57.
Global stock indexes showed a similar trend, with slight increases on Monday, as investors awaited signals on potential interest rate cuts by the US Federal Reserve. Analysts and financial market expectations suggest May as a possible start for rate cuts this year.
According to Matteo Greco, a research analyst at fintech investment firm Fineqia International, the recent price surge in Bitcoin is primarily attributed to increased inflows into BTC spot ETFs. The approval of the first US spot Bitcoin ETFs by the US securities regulator on January 10 marked a significant milestone for the cryptocurrency industry.
Greco highlighted a slowdown in outflows from Grayscale Investment’s Grayscale Bitcoin Trust (GBTC), which received approval from the US Securities and Exchange Commission (SEC) to convert to an ETF. Meanwhile, BTC Spot ETFs witnessed a total net inflow of approximately $1.2 billion, the highest weekly inflow since their launch.
Analysts predict significant growth in inflows into the new ETFs, with estimates ranging from $10 billion to potentially $100 billion this year alone.
The market is also eagerly awaiting the decision on seven pending applications for ETFs tied to the spot price of Ether, expected to be delivered by the SEC by May.
Investors are closely monitoring the upcoming Bitcoin “halving,” expected in April, a process designed to reduce the release rate of Bitcoin. Previous halvings have resulted in significant rallies in Bitcoin’s value.
Ben Laidler, global markets strategist at eToro, emphasized the importance of these developments, stating that they are significant for the cryptocurrency market, which remains the smallest, youngest, and most retail-dominated asset class.
Courtesy First Post (With inputs from agencies)
